2014 (6) TMI 664 - AT - Income Tax

Withdrawal of deduction u/s 36(1)(viia) of the Act - Provisions of standard assets Held that - The assessee has accepted that the third issue relating to the provisions of doubtful debts for the purpose of allowance of deduction u/s 36(1)(viia) is similar to as decided in assessee s own case for the previous year thus, it is very difficult to accept the contention that at the time of hearing, he has not admitted the fact and on the contrary, has argued the issue on merits highlighting the distinguishing features from the earlier year with the order of the AY - There is nothing in the record that on the issue, the Tribunal has overlooked the assessee s submission. Mistake apparent on record - Whether there is any mistake apparent from record within the ambit of section 254(2) which has crept in the order Held that - The issue of allowance of deduction u/s 36(1)(viiia) with regard to the provisions on standard assets was subject matter of revision by the Commissioner u/s 263 not only in the year but also in the earlier year i.e., 2005-06 - the major difference in this year is that, the Commissioner has passed the order after discussing it on merits and has directed the AO to withdraw the deduction u/s 36(1)(viia) in the earlier year - on the material difference itself, the earlier order of the learned Commissioner as well as the Tribunal cannot be held to be mutatis mutandis applicable in this year thus, the order is recalled for the purpose of withdrawal of deduction u/s 36(1)(viia) in relation to the provisions of standard assets Decided partly in favour of Assessee.

Summary

Issues:
Recall of impugned order dated 6th June 2012 by the Tribunal, Mumbai Bench in assessee's appeal regarding withdrawal of deduction under section 36(1)(viia) of Rs. 405,17,20,944 in relation to standard assets.

Analysis:
The assessee sought recall of the impugned order based on the limited issue of withdrawal of deduction under section 36(1)(viia) in relation to standard assets. The Tribunal observed that the issue was similar to the preceding year 2005-06 but noted that in the earlier year, the Commissioner had not decided the issue on merits. In contrast, for the present year, the Commissioner had given a categorical finding on the issue, directing the exclusion of the sum from standard assets for the deduction. The Tribunal decided to recall the order for hearing the issue afresh on merits, as the earlier order could not be deemed applicable due to the Commissioner's differing approach in the two years.

The learned Counsel argued that the facts and circumstances of the earlier order were no longer relevant as the Commissioner had decided the issue on merits in the current year. However, the Tribunal noted that the Counsel had previously accepted that the issue was covered by the earlier Tribunal order for the assessment year 2005-06. The Tribunal emphasized the importance of raising correct facts and contentions during the hearing and highlighted that any distinguishing features should have been pointed out earlier. Despite the Counsel's arguments, the Tribunal found no oversight in the assessment of the issue and decided to recall the order for a fresh hearing based on the material differences in the Commissioner's approach between the two years.

In the interest of justice, the Tribunal decided to recall the order dated 6th June 2012 to hear the issue of withdrawal of deduction under section 36(1)(viia) in relation to standard assets afresh on merits. The Tribunal acknowledged the material difference in the Commissioner's approach between the current year and the earlier year, leading to the decision that the earlier order could not be considered mutatis mutandis applicable in the present year. The Registry was directed to schedule the appeal for further proceedings, and the assessee's miscellaneous application was partly allowed.

In conclusion, the Tribunal's decision to recall the order for a fresh hearing on the issue of withdrawal of deduction under section 36(1)(viia) in relation to standard assets was based on the material differences in the Commissioner's approach between the current year and the earlier year, emphasizing the need for a thorough examination of the issue on merits.